"There is a lot of debate, whether gamification is the next new thing or just a bunch of hype. It’s not the next big thing because it’s been around for years. There have been loyalty programs, point systems, and gaming mechanics in non-game activities since the invention of TV, radio, and advertising. However, it’s not all a bunch of hype either. By combining the loyalty programs of old with the new social tools and technology where everyone is connected and every piece of data is collected, we are at a point where we truly can turn every activity we do into a game."

"One difference is that older loyalty programs were blunt instruments. They started with “buy this now” and then you can get rewards. Now brands offer users various ways to get familiar with their content. At some point, users will make a purchase. But they may do it well after they engage, share, or discover the brand.

Engagement is the new way to measure the benefits of gamification, rather than outdated metrics such as page views. Metrics that matter with engagement are timeliness, frequency of return, duration of visits, virality, and user ratings.

For some brands, some of those metrics are more important than others. Users who participate in gamification programs, such as signing up to get virtual rewards for visiting a web site, want status, access to cool things, power to do more than others."

"I had an interesting conversation with Irving Fain of CrowdTwist. According to him many believe that people are willing to engage in gamified activities for status and to win virtual items. Mr. Fain believes, however, that this will get old quick and that people need to earn real world items of real world value to continue playing any game. If he’s correct (and he does have years of experience in the loyalty business), then a gamification project could cost a lot of money, as the more successful you are in engaging your users, the more prizes you have to give away."